THE IMPACT OF ISLAMIC BANKING TOWARDS CONSUMER BEHAVIOR IN PAKISTAN

Abstract

Purpose: Islamic banking is one of the most developing sectors in Pakistan. This study reveals the relationship between consumer behavior towards bank selection criteria and customer satisfaction. This study will provide help to prevail in Pakistan for a long period of time and to compete with conventional banking services through recognizing those factors which are directly linked with the satisfaction of customers towards Islamic banking services. Design/Methodology: For this purpose, data was collected from a sample of 154 customers in different Islamic banks in Karachi and online as well through a structured questionnaire containing 22 questions. SPSS has been used for data analysis. Correlation and regression analysis, Anova method was use to find out relationship among independent variables (religion, high profit &low service charges, influence of friends & family, service quality, responsive attitude of staff, mass media & bank image) and dependent variable (customer satisfaction). Findings: The findings show positive and significant relationship among all variables and customer satisfaction partially mediates the relationship between independent variables and dependent variables. It has been concluded that Islamic banking is impacting consumer behavior in Pakistan as these factors like Awareness of Islamic bank, Bank image, service quality, Mass media is persuading customers to stay loyal to Islamic Banks. Limitations OfThe Study: It has to be noted that the sample in the study is not accomplish with the diverse population (multicultural environment nationwide), so may affect the results in terms of generalization specially. The results cannot be generalized as the demographic variables vary place to place due to multicultural mind sets of customers. Originality/Value: We conclude that customers’ satisfaction is increasing day after day and their commitment is strong with the Islamic banks. Islamic Banks in Pakistan are now emerging as banking of first choice for customers due to their service quality and image in the marketing due to independent variable.